JetBlue Posts Its 1st Quarterly Adjusted Profit Since The Pandemic’s Start

JetBlue has reported its first profitable quarter since the pandemic began. The airline has seen continued capacity growth as demand for air travel has returned in the wake of the pandemic. This demand has produced record-high revenue for the company. Despite the recent rise in operating costs that tightened profit margins for airlines around the country, JetBlue has managed to keep its head above water and regain profitability status.

Quarterly report

JetBlue ended the third quarter of 2022 with $2.3 billion in unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities. This totals roughly 28% of all 2019 revenue. At the end of September 2022, JetBlue reported a 53% debt-to-capital ratio. Revenue per available seat mile during the quarter increased 23.4% year over three. The high revenue levels were driven by increased demand for air transit and increased operating costs that have been passed along to the customers.

Photo: Denver International Airport

Since travel restrictions have eased, air travel demand has skyrocketed. JetBlue has seen very high demand for leisure travel and VFR (Visiting Friends and Relatives) travel. Unfortunately for these optimistic explorers, the cost of air travel has risen significantly in the past three years.

With a rise in fuel prices and shortages of many necessary resources, including airplane parts and pilots, operating costs have increased just as quickly as demand has. During the third quarter of 2022, JetBlue reported a 32.4% increase in operating expenses year over three. The most significant cost increase has been that of fuel. Fuel prices increased 86% year over three. In the third quarter of 2019, the airline’s realized cost per gallon of fuel was $2.06; in 2022, it is $3.84.

The CEO of JetBlue Airways, Robin Hayes, shared the company’s excitement for this profitable quarter. Hayes stated,

“For the third quarter, we reached an important milestone in our recovery as we generated our first quarterly adjusted profit since the start of the pandemic. Looking ahead, we expect our profitability to carry through to another solid quarter of mid-single-digit pre-tax margins in the fourth quarter, and we’ll look to expand on that further in 2023 as we continue to restore our earnings power,”

Looking forward

The airline’s large equity sum and high revenue levels put it in a position to continue its expansion plans. This expansion is made possible by the recent increase in capacity. The airline saw a 0.5% increase in capacity over the third quarter of 2019. It anticipates that this capacity will continue to rise throughout the year as it further optimizes its services and acquires new aircraft.

Photo: LAX

The President and COO of JetBlue, Joanna Geraghty, shared the company’s positive outlook for the fourth quarter of 2022. Geraghty said,

“I’m proud of our team for their dedication in delivering the JetBlue experience to our customers through a very challenging summer and the most recent hurricanes. For the fourth quarter we expect capacity to be up 1% to 4% year over three, a modest sequential step-up versus the third quarter,”Throughout the quarter, strong leisure and VFR demand trends carried through the peak summer and into the fall trough period. We see that continuing here in the fourth quarter, and we’re confident in the demand backdrop for the year-end holiday peaks. For the fourth quarter, we expect unit revenue to increase between 15% and 19% year over three.”

What do you think of JetBlue’s first profitable quarter since the pandemic? Let us know in the comments below.